Distributor Dialog – Published in APPMA Advisor
November/December 2002

Is Your Product Packaging Ship-Shape?

XYZ Distributing orders 12 cases of doggy chew toys from Bennie’s Biscuits and Toys. Bennie’s ships the order with Fred’s Trucking Co., because they have the lowest cost on LTL freight, even though their service is spotty. The shipment takes 10 days to reach XYZ Distributing, which has now been out of stock on Bennie’s chew toys for nearly a week. XYZ’s sales force is pushing Bennie’s biggest competitor’s dog toys to customers because they have plenty of them in stock.

ABC Distributing’s warehouse personnel are picking orders using RF scanners that interface with the company’s inventory management system. Fishy’s Aquarium Products has printed the UPC code for their individually packed airstones on the case pack. The picker scans the case and believes that the order for six airstones from Pat’s Pet Store is six cases based on the incorrect UPC label. Pat’s receives six dozen airstones, but is billed for six. ABCDistributing is out of stock on the product two days later, even though their inventory system says they should have 66 in their warehouse.

Freight delivery delays, mislabeled products, missing or misapplied bar codes, and goods damaged in shipment are just some of the headaches that distributors encounter every day when receiving product from their suppliers. Some problems are simply the result of moving bulky or heavy items across thousands of miles of highway. But other shipping problems are entirely preventable and result in millions of dollars each year in unnecessary expense to both manufacturers and distributors.

Shipping and receiving are at the core of the manufacturer-distributor relationship. If products cannot get from the manufacturer to the consumer in good condition, with proper identification for billing and inventory, then the channel breaks down, sales are lost and costs skyrocket. Here are some suggestions on ways manufacturers can help to avoid common shipping problems:

Use Reliable Carriers
Distributors are managing inventory levels more closely today than ever before. That means that any delays in shipping often lead to out-of-stock situations for distributors, and their retail customers. Brian Brady of the Joseph M. Brady Co., Needham, MA, urges suppliers to contract with reliable common carriers that have a good track record on timely deliveries. “Slow or unreliable carriers can lead to lost sales for manufacturers and distributors”, he notes. “Shippers have to look at more than just price when deciding which carrier to use. Go with the best, not the cheapest.”

Use Better Packaging
Goods in transit are subject to lots of bumps and bruises during shipping. But manufacturers that package their products so that they are protected from damage under most circumstances are doing themselves and their customers a big favor. According to Fred Schober, Super Dog Pet Food Co., Leola, PA, “Manufacturers should use product packaging and master packs that maintain their integrity throughout the channel. That way, the product that ends up on the retailer’s shelf is in the same condition as when it left the manufacturer’s facility.”

One way to ensure that this happens involves good quality packaging of the product. Crushed boxes and torn bags will never be eliminated as long as there are forklift drivers, but packaging that resists damage under normal handling will eliminate most damage claims and returns.

Just as important is how the products are shipped. Pallets that are shrink wrapped with corner molding help protect what’s inside better than unwrapped skids. And don’t skimp when buying pallets either. Cheaply made skids can snap, damaging product and adding cost for the distributor if boxes have to be unloaded by hand.

Use Proper Identification
Mislabeled and poorly labeled cartons are a distributor’s worst headache because of the impact it has on warehouse management, inventory control and accounting. Ironically, labeling and identification problems are the easiest and least expensive problems to remedy, thanks in part to work already done by APPMA and PIDA.

Where cartons are identified is almost as important as how they are labeled. Carton identification must be on the perimeter where it is easily seen without unnecessary handling. This would seem to be a simple concept, yet one distributor has all warehouse personnel carry markers with them to identify cartons that manufacturers have mislabeled.

How cartons are labeled is of critical importance. According to Ken Chancey, regional Vice President South for Central Garden & Pet, improper use of bar codes and lack of standardization in identification, (sometimes even within individual manufacturers’ product lines), are the costliest mistakes manufacturers can make because of the repercussions throughout all aspects of a distributors business. The scenario presented at the beginning of this article of the UPC code being used as the master pack identifier is all too common.

Several years ago, a joint PIDA/APPMA best practices task force developed the Pet Industry Guide to Bar Codes, Common Forms, and EDI. The Guide was published in separate versions for manufacturers and distributors, and is a comprehensive how-to guide to standardizing product and packaging identification. The Guide is online and can be downloaded in whole or in part. PIDA members can access the Guide at www.pida.org in the Members Only section of the website. Click on Improving Your Supply Chains, then Supply Chain Support. The Guide is under the Technology page of the PIDA link.

There are real channel cost savings available to every manufacturer and distributor that begins to use the Guide to standardize package identification and communication throughout the pet product channel.